Insurance Exemption for 2-lot subdivisions

Property Law: 22 March 2019

Certain insurance exemptions exist for 2-lot subdivisions under section 7 of the Owners Corporations Act 2006.

These include:

• Division 6 of Part 3 (sections 54 to 65) of the Act regulates insurance.  Two lot subdivisions are exempt from compliance with:
  • section 59 requirement to take out common property reinstatement and replacement insurance;
  • section 60 requirement to take out common property public liability insurance;
  • section 61 requirement for reinstatement and replacement insurance and public liability insurance for all lots if a building is located above or below common property, a reserve or a lot,
  • section 62 permitting the lot owners to resolve to insure any additional insurable interest;
  • section 65 requirements for prescribed owners corporations to obtain a valuation of all buildings that it is liable to insure, renew the valuation every five years etc.

Other Exemptions:

• The various other compliance exemptions under the Act for 2-lot subdivisions include:
  • section 18: special resolution required to bring legal proceedings.
  • section 31: formal fee notice required
  • section 32: formal final notice required.
  • section 93: chairperson has a casting vote only if the voting is equal etc.
  • section 94: a lot owner cannot vote if fees are unpaid
  • section 95: What is a unanimous resolution? See above.
  • section 96: What is a special resolution? See above.
  • section 97: Interim special resolutions.
• The following Divisions are also exempt from compliance:
  • Part 3:
    • Division 2 Accounts and Audit
    • Division 3 Maintenance Plan
    • Division 4 Maintenance Fund
  • Part 4
    • Division 1 First Meeting of Owners Corporation
    • Division 2 Annual General Meeting
    • Division 3 Special General Meetings
    • Division 4 Procedure at General Meetings       
    • Division 5 Ballots
  • Part 9
    • Division 1  Keeping of Records
    • Division 2  Owners Corporation Register
  • Part 10:
    • Division 1 Complaints and Procedures

Please note: The information in this article is provided for general information purposes only and does not constitute legal advice. It is not intended to be comprehensive or to apply to any specific circumstances. You should seek independent legal advice before acting on any information contained in this article.